Why Electronic Arts’ share price plunged on Wednesday

Today’s video focuses on Electronic arts (NASDAQ: EA) and how its stock price fell more than 5% on September 15, over rumors that its Battlefield the match was going to be delayed. After the market closed on Wednesday, EA confirmed the rumors to be true. Either way, the gaming market continues to grow at solid levels, so the decline in stock prices could provide long-term investors with a buying opportunity. Here are some highlights from the video.

  1. A report by The NPD Group shows that total US video game sales increased 7% year-over-year (year-over-year) in August, and to date they have increased by more than 13%. Many investors worry that gaming revenues will decline as lockdowns loosen across the country, but that’s not the case when looking at year-over-year growth.
  2. Battlefield 2042 has been confirmed as delayed until November. The original release date was October 22. The upcoming holiday season could be the main reason for the drop in stock prices, as investors would have preferred an earlier date to give consumers ample time to purchase the game for the holidays.
  3. Initially, Battlefield 2042 would have been released before his competitor Call of Duty through Activision (NASDAQ: ATVI). With the date change, consumers will be able to purchase Call of Duty first, which could be why Activision investors were so enthusiastic on Wednesday, causing the stock price to end in the green.

Click on the video below for my full thoughts and analysis.

* The stock prices used were the closing prices of September 15, 2021. The video was posted on September 15, 2021.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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